Groceries delivered to my door?
Sign me up!

I’ll admit it. The thought of trading in the grocery store checkout line for an online cart to buy my weekly groceries puts a little spring in my step. I appreciate that I am heavily involved in the meat industry and have a deep love for brick and mortar stores, but the promise of groceries delivered to my front door intrigued me enough to try it out.

Online grocery is one of the great comeback stories. After the first online grocery delivery company Homegrocer.com failed during the dot-com bust of the 2000s, smart business people perfected the formula and they have returned stronger, more diverse and with better IPOs than ever before. Online grocers like AmazonFresh.com, FreshDirect.com and DoortoDoorOrganics.com are skipping brick and mortar stores for a strong online presence with regionally-based distribution warehouses and privately-owned delivery trucks. In 2014 IBIS World reported that online grocery sales had grown at a 14.1% annual rate over the past five years. In addition, profit estimates were $927 million, which is 8.5% of total revenue. For comparison, brick and mortar stores are at an average of 1.3% total revenue (FMI). Online grocery is only growing, with 54% of online grocery shoppers increasing their spending over the past year (Watson, 2015).

What does this mean for the meat industry?

For the right grocery shopper, online grocery can be a life saver. While it truly has the potential to replace or at least fill in the gaps of a regular grocery shopping trip (and that even goes for fresh meat sales), there is a price for convenience. From my estimates, an online shopper will pay more, but in the long run it’s an opportunity cost comparison. If the time saved by shopping online versus going to a brick and mortar store is greater, shoppers will increasingly make the switch. For meat suppliers, that means playing the game and working to create fruitful relationships with online grocery businesses. However, when trying to forge the sale, it will be important to have a good grasp of an online grocery’s unique buying, selling and distribution business model.

In order for brick and mortar grocery stores to compete, Meat Directors or Meat Managers need to constantly be giving consumers a reason to physically come into a store. That means emphasizing convenience, value and product freshness, along with unique advertising campaigns to peak and maintain a customer’s interest. Some retailers have been successful with a hybrid model that allows customers to order online and pick up bagged and ready to go groceries at the store’s front door. While this does require a bit of infrastructure and systems in place on behalf of the retailer to succeed, it also may require meat suppliers to produce specialty cuts or packaging for the retailer.

Who’s the customer?

I am the epitome of an online grocery consumer target. About five years ago — otherwise known as B.C. (before child) — I was a busy professional single whose clean refrigerator held nothing more than a half-gallon of skim milk and a few premium steaks in the freezer. Now I am a busy professional mom who can barely squeeze two gallons of whole milk, several frozen ground beef chubs and an entire pork loin into my over-stuffed refrigerator.

In either case, trips to the grocery store have always been a burden. Since I was often in grocery stores for professional reasons at the start of my career, I could find a thousand alternate things to do than hit the local grocer for personal items, and now it’s often comical to watch my 2-year-old’s grubby fingers pull random items off the shelves. Voila! Enter my reason for trying online grocery with front- door delivery.

Because I have a self-diagnosed obsession with online reviews, I have compared and contrasted three major online groceries in that format. Since only a few online grocers deliver to my region in Kansas City, I roped some friends into receiving packages on my behalf with the promise of free steak. Each is a potential online grocery customer as well: a busy professional single and a busy professional mom.

Let’s dig in!

The Basics
amazonfresh-logo-190915_150px

AmazonFresh.com4stars

Locations served:
New York City, New Jersey, Philadelphia, Southern California, Northern California and Seattle

Who got the delivery:
My high- powered single friend in San Diego

Fresh-Direct_150pxFreshDirect.com

3stars

Locations served:
New York City, New Jersey, Philadelphia and areas of Delaware and Connecticut

Who got the delivery:
My cousin, the busy professional and mom of two

door-to-door_150pxDoortoDoorOrganics.com

3stars

Locations served:
parts of Colorado, Kansas City, Chicago, Michigan and parts of the NE

Who got the delivery:
Me, the meat industry professional and mom

Ease in Online Ordering
5stars

I’ll be honest. I love shopping on Amazon.com! I read all the customer reviews, I religiously use the sorting capabilities and I even get excited over the “frequently bought together” suggestions. So when I had the opportunity to buy groceries in the same way, I was excited! Aside from forcing an available delivery zip code in order to browse items, AmazonFresh.com’s online ordering lived up to the hype and more!

3stars

FreshDirect’s online ordering was antiquated at best. Their online ordering mirrors that of an actual brick and mortar store with categorizations, cross merchandising and a large number of offerings, but their system does not have nearly the bells and whistles as other websites. The scheduling system was a bit confusing, and their check-out process seemed to take forever. Overall, they are due for an upgrade.

5stars

DoortoDoor organics online ordering was designed with the consumer in mind. Their website is truly beautiful, and their advance categorizations and enticing photography elevate the overall feel. They also have quick reference icons communicating various brand attributes along with a one click Shop By Recipe® function! Whoever designed their website knew how to appeal to consumers.

Pricing and Offering
2stars

AmazonFresh.com relies on suppliers to set actual product pricing, and for the offered regional and specialty brands, the pricing seemed in line with what they would normally cost at a brick and mortar store. The prohibitive costs are the incremental ones. There is a $299 annual signup fee for a PrimeFresh membership and a minimum $50 subtotal just to get the first delivery.

4stars

Pricing for FreshDirect is slightly more than what would be found in a brick and mortar store, but still not out of reach. They do not have a minimum order requirement but instead charge a flat fee of $7.99 for deliveries. There is an optional DeliveryPassSM subscription which is a maximum of $119/year with a minimum order of $30. I’m intrigued!

3stars

Because DoortoDoorOrganics is a hybrid subscription meal planner and online grocery, to get a delivery you must be subscribed to a “Produce Box,” which start at $25.99. Once you’re subscribed, you can shop the store, but be forewarned – all items are either organic or natural, and inherently pricey.

 

Delivery and Packaging
5stars

Among many things AmazonFresh does right, their delivery and packaging is on point! They make marketing magic with branded green delivery trucks, matching cooler bags and branded freezer packs. Refrigerated items even have special quick teardown Styrofoam sides that help protect deliveries from the hot sun. The beef items themselves were delivered frozen in wax paper wrapping, which made the steaks have a “local butcher” feel. This was definitely a nice selling point.

1star

On the plus side, FreshDirect delivery was perfectly timed; however, their packaging was less than desirable. The steaks were in traditional overwrap packaging, but then just thrown into a large cardboard box with no protection or way to keep the product cool, especially in the summer. The promise of convenience dissipates if a customer has to be home to receive his/her groceries.

3stars

First off, delivery was on time as promised; however, the packaging was way over done. There was literally enough padding and freezer packs to safely ship a delicate icicle to the Sahara and have it arrive safely. It is important to note that there was communication printed on the packing asking recipients to set everything out during normal delivery days so it could be returned and reused. Trouble is, not all customers will do that, which leaves their “better for the earth” vibe an empty promise.

 

What’s the final word?

In the long run I do not believe online grocery will replace the brick and mortar store completely, but it certainly has the potential to steal share from the U.S. grocery market as a whole.

What are your thoughts about online grocery? Tell us in the comments below.

 


 

IBIS World. (2014, December). Online Grocery Sales in the US: Market Research Report. Retrieved July 24, 2015, from IBIS World: http://www.ibisworld.com/industry/online-grocery-sales.html

FMI. (n.d.). Supermarket Facts. Retrieved July 23, 2015, from Research Resources: http://www.fmi.org/research-resources/supermarket-facts

Watson, E. (2015, July 7). Online grocery shippers are upping their spending online, but remain wary of buying fresh produce, says new survey. Retrieved July 23, 2015, from FoodNavigator-USA.com: http://www.foodnavigator-usa.com/Markets/Online-grocery-shoppers-are-upping-their-spending-online-survey

 

Trade Publications – Are they being read?

At Midan Marketing, we like to get a full view of the fresh meat industry – from producers to consumers and everyone in between. When we’re not studying consumers who purchase and consume fresh meat products, we’re talking to retailers and packer/processors about everything from best processing and merchandising practices to technology and innovation.

Recently, we surveyed retailers and packer/processors to better understand their media consumption habits. We asked them about what they’re reading, how frequently they are reading and how they prefer to get their news. We’ve been conducting this survey every other year since 2009, and for the first time, saw some shifts in how the industry is receiving the news. Below are some of the key findings from the survey.

1. Too many magazines, too little time.iphone_in hand_v1
You’re not alone if you can’t find the time to get through your stack of industry reading; our survey indicates that 53% of your counterparts aren’t either.

2. Newsflash: print is old news.
It’s no surprise that the trend is moving strongly to online (online had the highest readership at more than 80%) and away from print (print’s highest readership was less than 30%). So, if you want to get the most bang for your advertising dollars, you should consider focusing more heavily on online.

3. Ads are getting noticed.
Retail advertising and trade articles are sparking an interest or leading to an inquiry or purchasing decision for 76% of respondents (73% in 2013).

4. Don’t be a meathead; get on the social media bandwagon!
While the industry continues to use Facebook (43%) and Twitter (28%) to promote their companies and brands, use of these sites is declining compared to previous years. The proliferation of newer social media outlets, including Instagram, may be diluting their use. If you want to catch up to today’s tech-savvy consumers, you need to adapt to new social platforms faster.

What do you think? Do these findings align with your media consumption habits? I’d love to hear your thoughts. To learn more about Midan’s public relations and creative communications capabilities, contact me at c.ahn@midanmarketing.com. Thanks for reading!

Develop a High Performing Online Ad

As the Advertising Coordinator at Midan, I develop advertising schedules for our clients each year. Through my years of experience, I’ve put together some useful tips for online advertising.  First you must ask one of the most important questions in advertising:  “who is the target?” In order to effectively market, you must know your audience.  The following tips will help you develop a successful online advertising campaign.

Know your target
An advertising campaign will not be successful without knowing your target. Become familiar with your target – know their age, ethnicity, geographic location, habits, behaviors, likes, dislikes, etc.  Ask questions like:

  1. What online publications does the target read?
  2. How frequently do they read them?
  3. Do they participate in social media?
  4. What “language” do they speak?

Do your research
Reach out to potential publications and ask questions to better understand who they are reaching. Here are a few questions to get you started:

  1. What is the best performing ad space?
  2. What day has the highest performing ads?
  3. What is their online editorial calendar?

Develop compelling creative
Develop compelling creative that speaks to your audience.  Ads should always include a call-to-action; a strong one gets clicks, which is important if you want your target to learn more about the product or service you are offering.

The imagery is the first thing people notice. Use strong visuals that relate to your product. Bold, bright, clear images will have a positive impact on your click-through-rate (CTR).

Make sure your ads are linking to appropriate landing pages. If your ad is talking about “Product A” and you’re linking them to “Product B,” there will be a disconnect.

Test your creative
Developing ad variations is a good way to test different messages or images that speak to your audience. It’s important to refine your ads when something isn’t working, in order to achieve the best results.
Here are some variations you can try:

  1. Test various call-to-actions (i.e. Click Here, Try Now)
  2. Test words that speak to your audience (i.e. Free, New, Exclusive)
  3. Test people and product images

Measure your results
Request an online advertising report from the publications after each campaign. Compare this report to the traffic on your landing page. These reports will reveal the value of your campaign. It’s also helpful to know the publications’ average CTR of the space you advertised in so you can compare your ads performance to the average.

Track what works and what doesn’t. Don’t be afraid to try something new. Rotating creative is essential to keeping your audience engaged and making your campaign more effective. I hope these tips will help you develop a successful online advertising campaign.

 

Kristy Finley, Advertising Coordinator
Also known as the “Photo Shoot Coordinator Extraordinaire”, Kristy is responsible for ad placements in trade publications and online.  She helps to make sure every detail is perfect in our mouth-watering, professional meat photography.

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